I'm nervous about downloading the Choueifaty and Coignard paper at the tobam.fr site, because both Safari and Firefox are issuing fairly serious-sounding warnings about security issues with the site--it has the wrong security certificate or its misconfigured and Firefox is warning that some might b...

In my mind, a maximally diversified portfolio is one in which what the diversification ratio (DR) is maximized. The diversification ratio is a relatively new concept, and basically is the portfolio's weighted average asset volatility divided by its actual volatility. It appears to have been introdu...

It is according to Prof. Siegel's look at the January effect, from "Stocks for the Long Run": For one thing, Siegel was only looking at small cap stocks in general and not small cap value in particular. Yes, and the topic of this thread is "the size effect." It is specifically about one factor, the...

You already have precious metal equity in your 2 other funds, and this as market weight. You do not have Emerging Markets. If you buy more of the precious metal fund you will concentrate more of your money in a very narrow sub-sector, with a multiple of the market weig, and hence be less diversifie...

I think it is because somebody used 50/50 once and everybody else followed, so no real reason. Or maybe somebody did a study and only back-tested 50/50, so that is what you get. Something similar happened with the dosage for baby aspirin. Ever wonder why the pills are a very oddball dose? What's so...

I was going to replace it with something else, but the first Betterment sample portfolio I found in a Google search is all "value" ETFs, no "blend," while Wealthfront's does not have either a value or a growth tilt.

What the fumarole is "Exponential Technologies?" The only one I ever heard of is It's something of an investment theme for Ric Edelman that he pushed, and he has enough AUM and clout to actually make a fund happen. Check out iShares Exponential Technologies ETF (XT), which uses an index from Mornin...

I’m chasing an alpha of zero, after taxes and fees. Indeed. The last sentence in the article quotes the authors as saying "They know that alpha is important, but cannot effectively capture it.” Why is alpha important? Persistent alpha would be important. If, as the authors say, it is "negatively au...

??? "Forever" implies into and through retirement. Without getting into the debate about glide paths, I personally find that my own risk tolerance has indeed matched up well with the idea of declining risk tolerance with age, therefore a declining stock allocation with age. Now, of course, you only ...

...But the goal of passive investing is not passivity in the sense of no transactions, the goal is to replicate the "market portfolio."... I'm not sure if I agree with that or not :-? Something about that definition rubs a little bit funny. The idea of "passive investing" has been around long befor...

...That's not contradictory, though... The conclusions about size being more robust are only in the context of a multi-factor model that controls for junk. Not the regular size factor that you'd see in the Fama-French 3-factor model. The second paper makes a different point about different effects,...

This is a great find. As the graph clearly shows, there is a substantial return to the size factor in January, but absolutely no evidence of any size premium outside of January. The returns to size are completely flat throughout most of the year. Whatever premium the size factor has seems to be gen...

Another interesting read from AQR, from 2015: The Small-Firm Effect is Real, and it's Spectacular , and the 2015 paper it references, Size Matters, if you Control Your Junk by five authors including two of the authors of the 2018 paper . (As a general skeptic I like the 2018 paper better. That's jus...

To me the ideal passive stock market fund would be one that never, ever trades. That's even better than an index fund that trades smartly. The only downside is a gradual loss of diversification, which is meaningless over a human lifetime. Why is that ideal? Lowest cost. You mean like the Voya Corpo...

We still use it. The last time we used was in 2017. We were at a campground in Nebraska. We let the battery go dead, my own fault. I have no doubt the campground hosts could have helped us call a tow truck with a booster battery or perhaps given us a boost themselves, but anyway, AAA worked fine. To...

Bogleheads: I would like to see an actual portfolio designed by the Ric Edelman group. Thank you and Best wishes. Taylor Ric has a quick robo advisor: Ric GPS I do not think this counts as an "actual portfolio." I can't speak for Taylor but to me an "actual portfolio" would name the actual funds an...

...I mean, we agree this is an especially terrible fund right?... I wouldn't know. I think it's the only mutual fund that tracks S&P 600 Pure Value, which, if so, would make it both the worst and the best fund of its kind. Maybe there is general agreement that it is a terrible fund in hindsight, bu...

This is a sort of a trick question and I do not want to hide the fact that it's a trick question... but I am going to be tricky enough not to state what I think the explanation is. According to the Credit Suisse Global Returns Yearbook, from 1900 through 2017 (i.e. over a century): The total real re...

I'm a BH newbie, and I appreciate everyone's willingness to help with financial education. I recently stumbled upon HFXIX in my quest to learn more about financial assets. Initially, HFXIX sounded like a good place to park a small chunk of money for a long period of time (about a decade, which is w...

I am an unsophisticated investor. This is partly because, when I look carefully at sophisticated asset classes and strategies, I find them unconvincing. Bogleheads usually invest in traditional "securities:" stocks, bonds, and cash-equivalents, and we usually do so via broad-based mutual funds and E...

Relation between annuity yield and interest rates https://www.forbes.com/sites/wadepfau/2015/08/25/annuity-pricing-sensitivity/#6aaf64d374d2 Yes, higher present interest rates do increase the yield, but less than point-for-point. Because much of the payout from an annuity is not coming from interes...

Iran sanction. Production cut and consumption up. Supply and demand. Usually at end of business cycle, oil will perform well. I am adding energy too. Venezuela, too. Incredible as it seems, the Venezuelan government has not even managed to maintain the infrastructure for oil production: Oil Rises a...

I hope Financial Engines was telling the truth, when they said they would delete all my data when I closed the free account I had with them. Some may recall that they were originally a completely free-as-in-beer website, and I opened an account with them in the year 2000 and gave them all my financi...

I'm with Victoria. Yes, it's worth revisiting one's old predictions, but by jumping the gun, Snowjob has simply launched a fresh round of arguments over our personal predictions about the next seven months. Of course, willthrill's point is how bad predictions are, but he is predicting that Snowjob'...

What are the disadvanges of the brokerage account vs the mutual fund account? I remember clicking something to accept the upgrade a year or two back but haven't noticed any differences. The mutual fund accounts offered a variety of automatically scheduled purchases, sales, and exchanges. I don't th...

I will just point out that this is the way Fidelity has done it at least since 2006, probably much earlier, and probably Schwab, too. My only "account" at Fidelity was a brokerage account, and Fidelity funds were held within the brokerage account. As far as I know it is still possible to have an acc...

I'm with Victoria. Yes, it's worth revisiting one's old predictions, but by jumping the gun, Snowjob has simply launched a fresh round of arguments over our personal predictions about the next seven months. Of course, willthrill's point is how bad predictions are, but he is predicting that Snowjob's...

We have the package of ordinary new safety and driver-assist features on our ordinary 2016-model car: pre-collision sensing, late departure alert, blind spot sensing, and so forth. I think it's worthwhile. Three features we find really valuable are the blind-spot sensing, the "rear cross traffic" al...

He never mentions Treasury inflation-protected securities (TIPS). He never says why. Are his comments supposed to apply to TIPS, too, or only to nominal bonds? I don't know. AFAIK he hasn't said. I've followed Buffett for a long time and don't recall him ever specifically addressing TIPS, but I fee...

I used a FIRECALC-like tool provided by Fidelity, called the Fidelity Retirement Income Planner, circa 2007. Here are some things that really influenced me. a) I had and have a very conservative allocation. After I ran the tool, it gave me a very specific recommendation that I should consider increa...

One obvious reason for rebalancing, the one I think everyone agrees on, is that if you have chosen, say, a 40/60 asset allocation based on your risk tolerance, and you do nothing, and it drifts to 70/30, you have probably exceeded your risk tolerance and you should have done something about it. (In ...

No true Scotsman No true Scotsman or appeal to purity is an informal fallacy in which one attempts to protect a universal generalization from counterexamples by changing the definition in an ad hoc fashion to exclude the counterexample. Rather than denying the counterexample or rejecting the origin...

I think if you read his shareholder letters you'd be less unsure of what he says. Also, there would be no question as to context or his audience. The shareholder letters are written to Berkshire shareholders. What he says on CNN or whatever in sound bites should be largely ignored for what he says ...

My objection to Buffett is that he never seems to explain himself. He says what he says. What he says is short, cryptic, and incomplete. He does not have some longer book in which he fills things out. Almost everyone who cites Buffett puts an interpretation on Buffett's words, and many fail to quote...

$60/month for fiber optic "high speed" Internet, 75 mbps down, 30 mbps up ("high speed" being the slowest service offered, of course!) They throw in VOIP-based phone service for free. The phone goes out if the power goes out. We decided that was acceptable to us because we have our cell phones as ba...

The Kizer paper is pretty interesting and deserves more discussion. The link to the paper is Re-Examining the Credit Premium and the full paper can be downloaded there at no cost. I have a problem with the abstract, which states, in part: The differences in findings appear to be driven by the abnorm...

1) This board is devoted to "Investing Advice Inspired by Jack Bogle." Not everyone who calls himself or herself a Boglehead agrees with everything Bogle says or does everything he recommends--I don't--but it is relevant nevertheless. Bogle's own investments are about 50% stocks, 50% bonds. And he's...

Would you be thinking of "passive funds that are willing to accept a little tracking error" in general, or would you be thinking specifically of Dimensional Fund Advisors (DFA?) I ask because DFA is the only fund family I personally am aware of that does this. FWIW, Vanguard does this, too. Their n...

False. When I rebalance our portfolio I buy low and sell high. Automatically. It's true that some people are able to "front run" a stock that's about to be added to an index. Except that modern indexes make this hard to do. Index providers have been doing things like this since at least the year 20...

???? I don't invest in IPOs. I don't even know if I can . I've heard that the whole process is reasonably unfair to the general public and that a lot of people get a chance to get in ahead, get special treatment by the underwriters or whatever, and skim the cream. But it doesn't matter because I wou...

I think the argument stating that the use of active management to overcome these potential weaknesses of pure indexing is a bit of a straw man. The real comparison should be to passive funds that are willing to accept a little tracking error to overcome the weaknesses of pure indexes. Dave Would yo...

P.S. There was quite an interesting episode of Planet Money, The Invisible Plumbing of Our Economy, mostly about the Automated Clearing House (ACH) system. Basically... it sucks, but nobody has any incentive to do anything about it.

oner, I sense that you are pretty ticked off at Vanguard. Why make a post about " more rotten service from Vanguard?" If I seriously feel I am getting "rotten" service from a company, I'm outa there. Why not move to Schwab or Fidelity, and then make a few follow-up posts reporting on your experience...

1) Even if his argument were true, it would only apply to the S&P 500 index. For about twenty years now, index providers have been aware of the problem of front-running and have made it difficult, e.g. by randomizing the day when a stock is added to the index. So don't use an S&P 500 fund, use a tot...

I can't deal with half the world saying that the Bloomberg Barclay's Aggregate Index is too heavily weighted in government issues and that everyone should have more corporates than that, half the world saying that everyone should be 100% Treasuries, and the third half saying that everyone should hol...

Estimating the spread in returns was tough and honestly my gut feeling was off and I wasn't really sure there. But I'm kind of disappointed somehow that people apparently don't understand what rebalancing does with respect to risk. Starting from near a market peak with a given allocation, of course...